Refer to Figure 21-26. Rhonda experiences an increase in her hourly wage. Her optimal choice point moves from A to B. For Rhonda,
a. Leisure is a normal good.
b. Her labor supply curve is backward bending.
c. Both a and c are correct.
d. Her labor supply curve is upward sloping.
Answer: C. Both a and c are correct.
You might also like to view...
The first automobile manufacturer to use a division of labor and to use a moving assembly line was
A. Henry Ford. B. Henry Leland. C. Henry Olds. D. Andrew Carnegie.
Assuming all excess reserves are loaned out, if the reserve ratio is 1 percent, the money multiplier will be equal to
A) 1. B) 10. C) 11. D) 100.
If expectations about future income change, there is
A) a decrease saving if people expect income to decrease in the future. B) a decrease in saving if people expect income to increase in the future. C) an increase in saving if people expect income to increase in the future. D) no change in saving until income actually changes. E) a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.
You have observed a consumer who purchases only goods 
and 
and have concluded that the consumer's tastes are quasilinear in 
. Whether
the consumer purchases more or less of 
when the price of 
falls then depends on the size of the substitution effect.
Answer the following statement true (T) or false (F)